During the 13th week of this year, the CIS export markets for most products took a break from their price rise trend, which had continued unabated since the beginning of the current year. The only exception was the plate export segment, where prices for CIS-origin products maintained their rise. Scrap prices during the last week of March even saw some decrease in the export markets. On the other hand, the CIS domestic markets showed a very strong trend during the week in question. In particular, both the Ukrainian and Russian domestic longs markets were very active, indicating a price rise for all products. Meanwhile, the domestic flats markets developed at a slower rate, showing a price rise only for certain individual products.
Scrap: export markets slow down
After stagnating during the 12th week, the Black Sea scrap market started a downward movement in regard to the price of ex-CIS scrap during the 13th week. Although scrap consumers in the region returned to the market and some bookings for A3 grade scrap were made, the price level of these bookings were $5-10/mt lower than registered in the previous weeks. As for scrap supplies from the CIS, only limited volumes were offered for export during the last week of March due to the very strong demand for scrap from the Russian and Ukrainian domestic steel producers.
On the other hand, the Russian domestic scrap market was governed by a price rising trend during the week ended April 1. Thus, following the new increase trend in scrap procurement prices initiated by Severstal during the 12th week, several other domestic producers hiked their A3 grade scrap procurement prices by Ruble 200-400/mt ($8-15/mt). As a result, the new price for A3 grade scrap established itself at the level of Ruble 5,850-7,300/mt ($225-281).
The Ukrainian domestic scrap market entered a calm trend during the week ended April1. Although the scarcity of available scrap was felt in the market, no price corrections were observed during the week in question.
Long products: domestic markets gaining speed
During the 13th week, CIS suppliers of billets were still offering their May shipments for export. However, some offers for May production were heard but the price levels involved were not much different from those for April production. It seems that the export markets have overcome their problem of billet scarcity and are now more reluctant to accept a new price increase. The new price level for billets of CIS-origin stands in the range of $540-550/mt FOB. Meanwhile, Chinese billet exporters began to threaten the CIS suppliers' position even in the Middle East. Regarding billet supplies, the situation in the 12th week of limited supplies from the CIS due to the strong domestic market, continued in the 13th week. It is also expected that the Russian and Ukrainian domestic markets will continue to consume the majority of domestically produced semis, leaving only small amounts for exports. This trend is likely to continue up to the end of summer or early fall, when a slowdown in the markets can be expected.
As for long products, in the CIS export markets during the 13th week only structural steel saw a price increase - to the amount of $10/mt. With regard to the other longs, due to the fact that many producers have not yet announced their May prices, no changes have been seen in the market. However, judging from developments in the billet market, only a very small upward price correction can be expected from the CIS longs exporters during the upcoming weeks. As for supplies, the situation in the longs market is similar to that of the semis market, where the majority of Russian and Ukrainian origin products are supplied to the domestic market.
The Russian domestic longs market was characterized by a trend of price increase during the week ended April 1. In particular, rebar showed an increase of $10-20/mt, angle of $20/mt, while beam and channel bars increased by $50/mt. Generally speaking, the Russian domestic longs market is developing at a faster rate than it did last year, and some sort of stabilization or decline of market activities may be expected no earlier than the end of summer.
The Ukrainian domestic longs market also showed positive tendencies during the last week of March. The improved weather conditions, the growing construction sector, as well the strong demand from the neighboring Russian market, all contributed to further price increase. Thus, in the course of the week rebar prices gained by UAH 90/mt ($18/mt), beam and channel bar prices both rose by UAH 75/mt ($15/mt), while angle prices increased by UAH 95/mt ($19).
Flat rolled: small correction before final stabilization is expected in export
During the 13th week, the CIS flats export market entered a stabilizing trend as regards the majority of products. The only exception in this rule was plate, ex-CIS prices for which increased in the course of the week by $10/mt. Generally speaking, market players are expecting yet another price increase for CIS-origin flat products before an eventual stabilization due to the rise in slab export quotations worldwide.
The Russian domestic flats market showed a relative small price rise during the 13th week. However, due to the depreciation of the US dollar against the Russian ruble during last week, no changes were observed in the US dollar equivalent of the Russian domestic HR and CR prices. The exception was the upward rise in the galvanized steel segment during last week, where the product price increased by $5-10/mt.
The Ukrainian domestic market did not show much fluctuation either in its flats segment during the week ended April 1. The only product showing a positive correction during the week in question was HR, the price for which increased by UAH90/mt ($18) following the price corrections announced by the Ukrainian flats producers earlier last week.